3
QuizMultiple Choice

Economic Inequality

Question 3 • 1516 Ethnic Studies

What is one reason inflation can lead to economic inequality?

Answer
A
Not all jobs adjust employee pay to match changes to the cost of living.
B
Not all jobs provide healthcare benefits as part of an employee’s salary.
C
Many companies adjust salaries based on consumer price index increases.
D
Many companies have built-in increases for employee pay on an annual basis.

Explanation

Inflation raises the prices of goods and services, reducing what a paycheck can buy. If some workers’ pay does not rise along with the cost of living, their purchasing power falls while workers whose pay does keep pace are less affected; this can widen economic inequality. Therefore, the correct choice is “Not all jobs adjust employee pay to match changes to the cost of living.”

AI-written and checked against the verified answer.

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